Madras High Court
M/S.Harikrishna Electricals vs The Commissioner Of Labour on 5 June, 2025
Author: P.T. Asha
Bench: P.T. Asha
W.P.No.11840 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 05.06.2025
CORAM
THE HONOURABLE Ms. JUSTICE P.T. ASHA
W.P.No.11840 of 2021
and WMP.No.12588 of 2021
M/s.Harikrishna Electricals
Rep by its Proprietor Mr.P.Harikrishnan
S/o. Pattabi Seetharaman
25/11, Old Jail Road, George Town
Chennai - 600 001. ... Petitioner
Vs.
1.The Commissioner of Labour
Chennai - 600 018.
2.The Regional Provident Fund Commissioner
Chennai - 600 014.
3.The Regional Employment State Insurance Officer
Chennai - 600 034.
4.The Chairman
TANGEDCO, Anna Road
Chennai - 600 002.
5.The Managing Director
TANTRANSCO, Anna Road
Chennai - 600 002.
6.The Superintending Engineer /
1/8
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W.P.No.11840 of 2021
CEDC/Chennai-South II
Chennai - 78. ... Respondents
Prayer: Writ Petition filed under Article 226 of the Constitution of India
praying to issue a Writ of Certiorari, to call for the records pertaining to the
order in Kaditha No.Me.Po/Se.Mi.Pa.Va/The-II/Oo.Se.Po/Po.Me/Oo.Po-
2/A.No.404/21 dated 21.04.2021 on the file of the sixth respondent and to
quash the same.
For Petitioner : Mr.R.Selvakumar
For Respondents : Ms.M.Jayanthi
Additional Government Pleader for R1
Mr.T.R.Sundaram for R2
Mr.K.Prabakar for R3
Mr.A.P.Venkatesh Prasad
for M/s.T.S.Gopalan & Co. for R4 to R6
ORDER
The writ petitioner has invoked the extraordinary jurisdiction of this
Court under Article 226 of the Constitution of India, for issuance of writ of
certiorari calling for the records of the sixth respondent dated 21.04.2021 in
Kaditha.No.Me.Po/Se.Mi.Pa.Va/The-II/Oo.Se.Po/Po.Me/Oo.Po-2/A.No.404 /
21, and to quash the same.
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2. It is the case of the petitioner that he is a registered contractor under
the fourth respondent-TANGEDCO. The petitioner is aggrieved by the order
issued by the sixth respondent, in and by which a middleman / intermediary
authority, styled as "Compliance Audit Service Provider" has been created.
The said authority has been created for the welfare of the labourers employed
by the contractors, in providing audit service and to ensure compliance with
the provisions of the Contract Labour (Regulation and Abolition) Act,
Minimum Wages Act, Employees Provident Fund Act and the Employees
State Insurance Act. The remit of the work entrusted to these Service
Providers is to verify the salary payment bills with regard to the minimum
wages, payment of wages, EPF and ESI payments of the labourers engaged
by the registered contractors under the TANGEDCO / TANTRANSCO, for
which purpose, payments are made to the said authority.
3. On the strength of order of the fourth respondent, the sixth
respondent had issued an order dated 21.04.2021 stating that with effect from
19.04.2021, the Work Contract Bills of the contractors has to be accompanied
by the Statutory Compliance Clearance Certificate. It is this order the subject
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matter of challenge in the present writ petition.
4. The writ petitioner would submit that the sixth respondent does not
have the authority to issue such an order and has exercised the powers not
vested in him. The respondents do not have a delegated authority to pass the
impugned order. The writ petitioner would submit that an additional burden
has also been cast upon the registered contractors by way of charges, based
on the turnover of man-days, which is exfacie illegal. The petitioner
therefore sought to quash the said order of the sixth respondent.
5. The respondents 4 to 6 have filed the counter affidavit denying the
contentions of the writ petitioner that they are not competent to issue the
impugned order. The respondent-Corporation has the statutory duty to
ensure that the contractors engaged by them are complying with labour
enactments. The officials of the respondent are manually scrutinizing the
compliance requirements of the contractors once the bills are received by
them. However, this task has become a big challenge for the respondents as
they also apprehend human error could creep in. Therefore, there is a
necessity for an expert agency to verify the genuineness of the documents
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submitted along with the bills. The respondent would further submit that this
approach has not been implemented over night. Infact, before its
implementation, a pilot project was floated in North Chennai Thermal Power
Station for a period of two months, and on completion of the said exercise, it
was decided to extend the said facility to rest of Chennai. The respondent
would further submit that with effect from 01.01.2021, in all the tenders
floated thereafter, there has been an explicit clause that mandates the
contractors "to submit themselves to an audit and also that the cost of the
audit would need to be borne by them” Therefore, this clause has become
mandatory in all contracts post 01.01.2021. The respondents would therefore
seek to have the writ petition dismissed.
6. When the matter was posted today for arguments, the learned
Standing Counsel produced an order passed by this Court in W.P.No.20218
of 2020 and W.P.No.21322 of 2021, and would submit that a similar
objection was raised by the Contractors' Associations in engaging an outside
agency, however, the learned Single Judge had dismissed the said writ
petitions filed by them holding that there is an explicit clause in the tenders
floated by TANGEDCO from 01.01.2021, that the contractors should submit
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themselves to an audit and also the cost of the audit needs to be borne by the
contractors. It is relevant to extract paragraph No.5 of the order dated
03.04.2024 in W.P.No.20218 of 2020 and W.P.No.21322 of 2021, which
reads as follows :
"5. A perusal of the counter affidavit filed by the respondents
reveals that the requirement to submit the records for audit arises
out of a pure contractual relationship and merely because the
respondent is a Government entity, the writ petition itself is not
maintainable. Further in all the tenders floated by the
respondents from 01.01.2021, there was an explicit clause which
mandates the concerned contractors to submit themselves to an
audit and also the cost of audit needs to be borne by them.
Therefore, it is a part of the contractual obligations. Any parties
willing to accept these terms can apply. Therefore, the tender
condition cannot be questioned at the instance of any proposed
party merely because it does not consider it suitable. Such
conditions cannot be termed as irrational or opposed to public
policy or unconscionable. The mechanism has been put in place
based on past experience to ensure proper compliance of various
statutory obligations under various laws including labour laws
and also to prevent any liability or adverse consequences arising
out of improper compliance by the contractors. ..... ..... ...... "
7. Since the decision of the above judgment would squarely apply to
the facts of the case on hand, the writ petition is dismissed accordingly. No
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costs. Consequently, connected miscellaneous is closed.
05.06.2025
Index : Yes / No
Neutral Citation : Yes / No
ds
To:
1.The Commissioner of Labour
Chennai - 600 018.
2.The Regional Provident Fund Commissioner
Chennai - 600 014.
3.The Regional Employment State Insurance Officer
Chennai - 600 034.
4.The Chairman
TANGEDCO, Anna Road
Chennai - 600 002.
5.The Managing Director
TANTRANSCO, Anna Road
Chennai - 600 002.
6.The Superintending Engineer /
CEDC/Chennai-South II
Chennai - 78.
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P.T. ASHA, J,
ds
05.06.2025
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